Best Textile Stocks

Statistically, the Indian textile industry offers 4.5 crore people employment nationwide. This directly leads to the conclusion that this industry witnesses a huge demand. Pertaining to this, many people turn towards investing in textile stocks. Curious about the good textile stocks of India’s multi-billion dollar textile industry? Scroll down to learn more. 

What are Textile Stocks? 

In simple words, a textile stock is the share of a company that produces or deals in the manufacturing of textiles as a part of its business operations. Read on to find out about the best textile stocks to buy now. 

Overview of the Textile Industry 

The Indian textile industry, over the course of time, has been a major source of exports and an employer. It contributes to 2% of the country’s GDP and has a 7% output. The textile industry stocks are considered by both foreign and domestic investors; this is due to the fact that this industry is adaptable. After agriculture, this industry is the second largest source of employment. Furthermore, the power of the Indian textile industry relies on the usage of state-of-the-art technologies and its strong manufacturing base of a wide array of yarns and fibres, from natural fibres to man-made fibres.

Why Invest in Textile Stocks?

After the recovery from the Covid-19 pandemic, the textile industry has seen a significant amount of growth and thus, leading to the benefits of investing in the best textile stocks in India. Investing in textile stocks is seen as an opportunity for many reasons. Some of them are 

❖    Abundance of Raw materials: India has a large availability of raw materials required to manufacture textiles. India is self-reliant and accounts for approximately 27% of cotton production globally. 

❖    Government policies and initiatives: The government has taken numerous steps and policies to increase foreign exports and encourage investments. Furthermore, as part of the initiatives, the government has approved FDI of 100% in the sector. 

The Indian textile and apparel industry is estimated to increase by 2025-26 at a rate of US$ 190 billion. Curious about the best textile stocks to buy in India? Read on. 

Top 10 Stocks to Invest in India

Below is the top 10 textile stocks list that you can opt for as an investment option in India: 

❖    Trident Ltd. 
❖    Vardhman Textiles 
❖    Sangam India Ltd.  
❖    The Raymond Organization 
❖    Lux Industries Ltd. 
❖    Jindal Worldwide Ltd. 
❖    Sheela Foam Ltd. 
❖    Swan Energy Ltd. 
❖    Welspun India Ltd. 
❖    Grasim Inds

Factors to Consider Before Investing in Textile-related Stocks in India

After understanding and reviewing the best textile stocks, there are certain factors that you should keep in mind before investing. Listed below are a few factors for your assistance: 

❖    Market Capitalization: Before investing in a textile stock, it is advisable to review the market capitalization of the company. Stocks with a large-market capitalization are less likely to be volatile to market fluctuations as compared to stocks with a small market cap. By assessing the market capitalization, you can easily make an investment without having to overpay. 

❖    Long-term Investments: When considering investing in textile-related stocks, it is recommended to opt for long-term investments. This is due to the fact that a long-term investment with a favorable price-to-earnings ratio may be more profitable. 

❖    Profits: When choosing a stock, it is advisable to review its performance. This means evaluating whether the particular textile company stocks are profitable or not. In an investor's view, a decline in share count coupled with a constant profit may indicate a higher investment value.

❖    Financial Position: One of the major factors that you should look for is the financial position and stability of the company. Ensure that the company has a good track record when it comes to stocks and investments in terms of profit generation. 

❖    Stay on Top of Trends: It is highly necessary to keep track of the current trends that prevail in the textile sector stock industry. This will help you in choosing the right stock and earn higher returns on investment. This also includes being on top of the news and industry trends and making sure not to miss out on anything. 

Performance Overview of Textile Stocks List 

Following is the performance review of the top textile stocks in India: 

❖    Trident Ltd.: Over the years, with the assistance of its founder, Mr Rajinder Gupta, the flagship company, Trident Ltd., has seen a significant amount of growth. Today, it is among the leading textile manufacturers in the world. With a market capitalization of Rs. 14,650.87 crores, the company has a promoter holding of 72.94%. Furthermore, the dividend yield is estimated at 1.26%, ROCE is 23.04%, and ROE is 22.91%. The face value of the company amounts to Rs. 1, and the book value is Rs. 7.66. The EPS is Rs. 0.94, and the stock PE is valued at 30.58%. 

❖    Vardhman Textiles: Vardhman Textiles is a leading textile company in India, with a presence across the entire textile value chain from yarn to fabric to garments. The company was founded in 1965 and is headquartered in Ludhiana, Punjab. With a market capitalization of Rs. 8,631.89 crores, the company has a promoter holding of 63.86%. Furthermore, the dividend yield is estimated at 2.26%, ROCE is 25.69%, and ROE is 24.57%. The face value of the company amounts to Rs. 2, and the book value is Rs. 281.55. The EPS is Rs. 31.87, and the stock PE is valued at 9.37%. 

❖    Sangam India Ltd.: This company is considered to be one of the top cotton producers in the country. It has a community of over 10,000 merchants and is worth Rs. 1323 crores on the stock exchange. With a market capitalization of Rs. 1,068.50 crores, the company has a promoter holding of 70.28%. Furthermore, the dividend yield is estimated at 0.84%, ROCE is 17.68%, and ROE is 22.55%. The face value of the company amounts to Rs. 10, and the book value is Rs. 184.33. The EPS is Rs. 34.52, and the stock PE is valued at 6.87%. 

❖    The Raymond Organization: The Raymond Organization is a textile and apparel company based in India. It was founded in 1925 by the late Vijaypat Singhania and is headquartered in Mumbai, Maharashtra. With a market capitalization of Rs. 8,499.14 crores, the company has a promoter holding of 49.15%. Furthermore, the dividend yield is estimated at 0.24%, ROCE is 6.96%, and ROE is 20.86%. The face value of the company amounts to Rs. 10, and the book value is Rs. 310.15. The EPS is Rs. 26.36, and the stock PE is 0. 

❖    Lux Industries Ltd.: Lux Industries Ltd. is a leading textile company based in India. It was founded in 1957 and is headquartered in Kolkata, West Bengal. The company primarily manufactures and markets innerwear, hosiery, and knitwear products for men, women, and children. With a market capitalization of Rs. 3,797.15 crores, the company has a promoter holding of 74.19%. Furthermore, the dividend yield is estimated at 0.95%, ROCE is 34.71%, and ROE is 29.35%. The face value of the company amounts to Rs. 2, and the book value is Rs. 475.73. The EPS is Rs. 62.71, and the stock PE is valued at 20.13%. 

❖    Jindal Worldwide Ltd.: Jindal Worldwide Ltd. is a leading textile company based in India. It was founded in 1986 and is headquartered in Mumbai, Maharashtra. The company is engaged in the manufacturing and distribution of textiles, home textiles, and branded garments. With a market capitalization of Rs. 6,145.95 crores, the company has a promoter holding of 61.32%. Furthermore, the dividend yield is estimated at 0.03%, ROCE is 19.10%, and ROE is 22.75%. The face value of the company amounts to Rs. 1, and the book value is Rs. 30.96. The EPS is Rs. 6.16, and the stock PE is valued at 49.78%. 

❖    Sheela Foam Ltd.: With a market capitalization of Rs. 10,682.95 crores, the company has a promoter holding of 72.95%. Furthermore, the dividend yield is estimated at 0%, ROCE is 24.44%, and ROE is 17.75%. The face value of the company amounts to Rs. 5, and the book value is Rs. 140.86. The EPS is Rs. 19.51, and the stock PE is valued at 56.12%. 

❖    Swan Energy Ltd.: With a market capitalization of Rs. 5,968.48 crores, the company has a promoter holding of 64.09%. Furthermore, the dividend yield is estimated at 0.04%, ROCE is 1.69%, and ROE is 0.28%. The face value of the company amounts to Rs. 1, and the book value is Rs. 48.46. The EPS is Rs. 0.41, and the stock PE is valued at 557.84%. 

❖    Welspun India Ltd.: This company is ranked the top third textile company in the country. Among the USD 2.7 billion Welspun groups, this company is a major leader in home textiles. With a market capitalization of Rs. 6,422.38 crores, the company has a promoter holding of 70.36%. Furthermore, the dividend yield is estimated at 0.23%, ROCE is 14.73%, and ROE is 11.51%. The face value of the company amounts to Rs. 1, and the book value is Rs. 35.46. The EPS is Rs. 1.17, and the stock PE is valued at 55.54%. 

❖    Grasim Inds: With a market capitalization of Rs. 1,03,554.91 crores, the company has a promoter holding of 42.75. Furthermore, the dividend yield is estimated at 0.64%, ROCE is 6.25%, and ROE is 5.90%. The face value of the company amounts to Rs. 2, and the book value is Rs. 739.82. The EPS is Rs. 43.19, and the stock PE is valued at 36.41%. 
 

Conclusion 

While evaluating the textile stocks, it is necessary to review the information as mentioned above thoroughly. It not only increases your knowledge but gives you an idea about how to choose the right stock and when to invest in it. With the rapid increase and growth in the textile industry, there is sure to be an elevation in the textile sector stock market. 

FAQs on Textile Stocks

Which Indian companies are investing in the textile sector?

The top Indian companies that are investing in the textile sector stocks are Welspun India Ltd., Grasim Inds, Vardhman Textiles, and Trident Ltd., among others. 

What is the future of textiles in India?

The demand for textile sector stocks will rise manifold as the global population will touch the 8.1 billion mark by 2025.

Who is the largest manufacturer of textile stocks in India?

There are numerous textile manufacturers in India. However, the largest and the best one is considered to be Trident Limited. 

Is it good to invest in the textile industry?

Being one of the highly dynamic and well-developed industries in the country, the Indian textile market comes second to the spices industry in terms of foreign and domestic investments. 

What is India's share in textiles?

The Indian textile industry holds historical significance, and over time, it has developed rapidly. Pertaining to this, textile export in India accounts for a 6% share. 

How can I invest in textile stocks using the 5paisa App?

To invest in textile stocks using the 5paisa app, you have to install the app, sign up, search for stocks, and invest in them. The easy user interface of this trading app allows you to carry out your investment journey smoothly.